Mall war: How redevelopment of the former Hazelton Lanes sparked a poisonous feud in wealthy Yorkville
National Post
Richard Warnica
04 July 2015
J.P. Moczulski for National Post
Marilyn
Snead, left, Esther Cohen, and June Mitchell on the terrace of their
Yorkville condo building. They came into conflict with a developer
over a renovation, visible behind them, to the mall formerly known as
Hazleton Lanes.
The Great Battle of Yorkville broke out into active combat in the fall
of 2014, when June Mitchell, an 86-year-old grandmother, staged a
sit-in at a mall developer’s office. It was nearing Yom Kippur, the
Jewish high holiday, and Mitchell had a dinner planned. She had the
food set and the timing down. Everything was ready to go. Until, all of
a sudden, it wasn’t.
Eight days before her dinner, Mitchell learned First Capital Holdings,
the developer renovating the mall attached to her condo building,
planned to shut her power off on Yom Kippur weekend. For Mitchell, it
was the last straw. After three years of squabbles with First Capital,
she’d had enough. No power meant no family dinner. And Mitchell, who
occupies the no-nonsense end of the grandmother spectrum, was not about
to let that happen.
“It’s like turning off the lights at Christmas,” she says. “How is Santa Claus going to get there?”
‘It’s like turning off the lights at Christmas’
Mitchell marched — limped, really, she had a problem with her knee —
into First Capital’s construction office. She sat down and refused to
leave until a manager saw her. Esther Cohen, another grandmother, with
her own dinner plans, followed. “I said ‘Consider this a sit-in,'” she
says. Other residents followed.
It’s an incident that has come to be known in local lore as the “Yom
Kippur Rebellion.” And it was, remarkably, neither the first nor the
last explosion of bad blood between the well-heeled residents of 77
Avenue Rd. and the mall’s owners.
The fight — over renovations and power and courtesy — has stretched on
for more than three years, winding its way in and out of court, and
leaving feelings bruised on all sides.
The residents accuse the mall of, among other things, shutting off
their power without notice, tearing out expensive shared equipment
without consultation, and eradicating a fire exit on their terrace. The
mall developers, meanwhile, claim they have done everything they can to
accommodate the condo owners, while doing renovations that benefit
everyone in the long run.
J.P. Moczulski for NP
J.P. Moczulski for NPEsther Cohen listens as Marilyn Snead looks through legal papers at their tony Yorkville condo building.
What’s clear is that some owners have come to hate the developer in a visceral way.
“They despise First Capital,” says Marilyn Snead, president of the condo board. “They’re boycotting the mall.”
With the renovations nowhere near complete, the fight looks set to drag
on for years, roiling up tempers in a tony Toronto enclave and
highlighting the problems that can come when residential and commercial
real estate intertwine.
The roots of the struggle trace back to that very mixing. From the
outside, the condo complex and the mall look like one building. They
share a common exterior, but have separate entrances. The mall, which
used to be known as Hazelton Lanes and includes a Whole Foods grocery
store, takes up most of the street level, while the condo, which has 71
units, stretches six storeys above and behind it.
The two were built together by the same developer in 1991. But they
were set up as separate legal corporations, with contracts governing
how they interact. The mall and the condo corporation share utilities,
the parking lot and some core services. Both are geared to a luxury
clientele; a two-bedroom penthouse in the condo building, for example,
was listed at $2.6 million in 2013.
For 20 years, the two got on fine, says Snead. Under previous owners,
issues, over bills or equipment, were worked out amicably, face to
face. But that changed when First Capital Realty took over, she says. A
large, publicly traded company, First Capital is based in Toronto, but
owns retail properties across Canada. It bought Hazelton Lanes in 2011
through its wholly owned subsidiary, First Capital Holdings.
The first fight between the new mall owner and the condo corporation
started over bills. But it quickly degenerated into more serious issues.
According to court documents, First Capital allegedly replaced boilers,
chillers and other equipment with no little or notice to the condo
corporation and without telling the owners how much they would be
expected to pay for the new gear. That work left the condo building
without heat last fall. “The hallways were freezing cold and many
owners were complaining,” wrote Nataliya Lysenko, the condo’s building
manager, in a signed affidavit.
‘The people who live in 77 Avenue Rd., perhaps the most exclusive
downtown neighbourhood in Toronto, are not homeless refugees or cattle
to be herded en masse into ‘group rate’ hotel rooms’
Court documents say the work began in the summer, was scheduled to last
between 60 and 90 days, and was set to be finished by Oct. 17th.
Jodi Shpigel, First Capital Realty’s senior vice-president for Central
Canada, says the company needed to replace that equipment, which was
badly out of date. She says the work was timed to ensure heat would be
available for residents by the time the cold season began. She adds
that First Capital has consistently informed the condo corporation of
what it was doing and why.
Those fights are still being litigated or mediated to this day. But others have since emerged.
The main battle started when First Capital announced plans to overhaul
the mall. At first, many residents were enthusiastic about the idea to
sink $100 million into a complete revamp of the dated structure and
rebrand it Yorkville Village.
“I think it’s great, to tell you the truth,” says condo owner Karen
Ritchie. But the process, some residents say, has been “hell.”
In November 2014, First Capital sued the condo corporation, seeking
access to its property to carry out renovations. The condo corporation
countersued, setting off a bitter string of legal squabbles.
According to court documents, First Capital allegedly blew out one set
of the condo’s breakers during construction, took out building permits
in the condo’s name without its permission or knowledge, and scheduled
and rescheduled power and heating outages with little or no notice to
residents.
Google Street View
Google Street ViewThe 77 Avenue Road condo and mall complex, in Sept. 2014.
(First Capital claims it only used the condo corporation’s power inadvertently or briefly, during an emergency.)
It was one such outage that led to the Yom Kippur showdown.
“They just decided they would turn the power off without any thought
that people would have plans. They had children coming and
grandchildren, caterers,” says Snead. “It was a pretty crude move to
make.”
Mitchell says she spent more than an hour in the First Capital office
that day before speaking to a manager, briefly. She left unsatisfied
and went back to the condo to enlist help.
The 77-year-old Cohen was the next one in. She had caterers booked for
her Yom Kippur feast and couldn’t believe First Capital planned to cut
her power off. She says she was told the manager was too busy to
see her. “And I said, ‘Well that’s all right, I have nothing to do.’ So
I’ll just sit here.”
And she did.
On September 29, three days before Yom Kippur, First Capital agreed to
postpone the power outage. Shpigel says they did so independent of the
protest, when they realized the conflict.
Another fight over a weekend power outage devolved into a tit-for-tat
court battle over compensation for residents who planned to move out
for the weekend.
According to a binding arbitration decision released in May, the condo
corporation’s lawyer first asked for $2,500 for each resident to cover
two nights in a hotel. When First Capital’s lawyer countered with an
offer of $350 a night, which he submitted would cover a deluxe king
room at Yorkville’s five-star Hazelton Hotel, the condo’s corporation’s
lawyer reacted with outrage.
“The people who live in 77 Avenue Rd., perhaps the most exclusive
downtown neighbourhood in Toronto, are not homeless refugees or cattle
to be herded en masse into ‘group rate’ hotel rooms,” he wrote,
according to the arbitration ruling — again, referring to a deluxe king
room at a hotel described as “the ultimate luxury” in Toronto. “This
suggestion is disrespectful and offensive.”
‘It’s the David and Goliath story. They’re Goliath and we just happen to be there. We’re just in their way’
In the end the arbitrator sided with First Capital, but not before
chiding both parties: First Capital for taking out the building permits
in the condo’s name, which the company says was a clerical error, and
the condo corporation for its “negative, hard line” approach.
Just weeks after that fight was settled, another one emerged.
In late May, First Capital planned to use a crane to lift new chillers
over the condo building and into a mechanical penthouse being built
behind the condo. (The penthouse, which looms over the condo’s outdoor
terrace, is another source of friction.) Days before the lift, the
company told the condo corporation the crane operator wanted the
building evacuated before he would do the work. The owners objected,
especially considering the short notice. So back to court the two sides
went.
Weeks later, in mid June, the chillers still sat outside the mall. The
work wasn’t done. The residents weren’t evacuated. Relations between
the two sides had, if anything, only grown worse.
Snead believes First Capital’s goal is to “crush the condo” corporation in an endless avalanche of legal filings.
“When First Capital wants to tell you something, they sue you,” she
says. With other residents, she blames the developer for failing to
communicate.
“Their thing is, ‘We can just do whatever we want,’ ” adds Ritchie. ” ‘We’re bigger than you, and you’ll just have to sue us.’ ”
First Capital Shpigel denies the claims.
“Looking back, there were many meetings between us and the
condominium,” she says. “Perhaps there should have been more or could
have been more. But I do believe that we communicated as best we could
have.”
She wants people to focus on the good things the renovation will bring to the neighbourhood.
“It’s a benefit to the residents that are above us, to the community,
to the city of Toronto,” she says. “This is a pretty major
redevelopment and investment that we’re undertaking and it really has
many benefits to so many stakeholders.”
Ritchie, for one, doesn’t disagree.
“I’m totally for the reno and what they’re doing,” she says. “I think
that it will be fabulous. I just want them to work with us.”
As for Mitchell and Cohen, they got their Yom Kippur meals. But they haven’t forgiven First Capital.
“It’s the David and Goliath story,” says Cohen. “They’re Goliath and we just happen to be there. We’re just in their way.”
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